THE ANDREW DAVIDSON INTERVIEW: Sir Alastair Morton

THE ANDREW DAVIDSON INTERVIEW: Sir Alastair Morton - Fierce and unyielding, the chairman of the Strategic Rail Authority made his pugnacious reputation in the '80s by saving the Channel Tunnel project from imminent collapse. But how long will he stay in h

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Last Updated: 31 Aug 2010

Fierce and unyielding, the chairman of the Strategic Rail Authority made his pugnacious reputation in the '80s by saving the Channel Tunnel project from imminent collapse. But how long will he stay in his last big task, sorting out rail privatisation?

Sir Alastair Morton looks weary, shoulders down, blue eyes tired and rheumy. He has been ill and, at 63 - an age when most bosses are contemplating retirement - has taken on a job that has proved far more sensitive and time-consuming than he first thought.

Yet if you were going to choose one man to sort out the mess that Britain's privatised railways have become, Morton's was an obvious name to plump for. As boss of Eurotunnel a decade ago, he got the Channel Tunnel built at a time when the whole costly business looked like collapsing into bankruptcy and bitter recrimination. He also has a track record of taking crucial public and private sector roles: working for the Industrial Reorganisation Corporation in the 1960s, heading the British National Oil Corporation in the '70s, running Eurotunnel in the '80s, chairing the Treasury's private finance panel, the body that drove through the early PFI ideas, in the '90s.

In short, he had the credentials, the character - a formidable intellect shackled to considerable aggression - and the yen for one last big job. Deputy prime minister John Prescott created the Strategic Rail Authority in early 1999 and asked Morton, who had advised him on rescuing the Channel Tunnel rail link, to chair it. Then, last year, events took another turn.

First, Morton fell ill, ravaged by thyroid toxicosis, a poisoning of the thyroid gland which, he says, nearly put him out for good. That came on top of the health problems he'd battled post-Eurotunnel: bad back, bad heart. Then, last autumn, disaster struck at Hatfield: a train tore off the lines, four people were killed, 70 injured, the safety of track all over Britain was called into question. Emergency re-railing was rushed in, timetables were ripped up and the whole future of the privatised rail network was thrown into doubt. All in all, it has been a difficult start.

'The job,' says Morton, rather croakily, 'has become much more intense than I thought. I proposed to take it on two and a half days a week, being a part-time but active chairman with a chief executive running the organisation - which is what I have got, but there are just so many issues in the changed circumstances of the railways ... I'm working four, four-and-a-half days a week, and over a much broader canvas than before.'

And now, late in the afternoon, his tall frame slumped at the table in his large corner office at the SRA's Victoria headquarters in London, he seems exhausted. A plate of biscuits sits untouched before him, as if he cannot even summon up the energy to nibble.

Appearances, however, can be deceptive. The old aggro, for one, is still working fine. 'You've only got half an hour,' he grumbles, as soon as I sit down. It's a trick he has been pulling for yonks, trying to put journalists on the back foot immediately as they walk in.

This time it seems rather pointless, as he then talks for more than an hour, cogently, eloquently and always with that extraordinarily brusque intellectual energy that is one of his trademarks.

That's just part of the package. Morton, South African by birth, British by choice, has long carried a reputation as an arrogant, prickly boss, a man who happily turns everything into a fight if you let him - all the more surprising when you consider how sensitive many of his old jobs have been. But he's never disputed the 'abrasive bruiser' tag. 'It's useful,' he chuckles, 'you don't have to waste time building up steam.'

Morton cemented the reputation when battling Eurotunnel's construction firms on cost overruns and time delays. One bitter opponent summed it up when yet another opening date was rescheduled: 'The only thing you can guarantee will be open in December is Morton's mouth.' But it worked, the tunnel got built, and people tend to forget that what is now hailed as a masterpiece of engineering was back then reviled as a Dome-like waste of money.

Attitudes change, people mellow. Even Morton? Perhaps. We are meeting a week before the general election, and there is certainly a sense, acknowledged by Morton, that right now he has to watch his words.

Why? What is he going to say?

'What I say is one thing, what you write is another,' he says, with a pause. Then he smiles slightly. With Morton there is always the sense that he is waiting, watching, like a cat, weighing up the risk before he decides to bite. It might be playful. It might not.

Not everyone appreciates his calculating, combative style. At the SRA, there have been rumours he's leaving, he's staying, he's still tight with Prescott but he's fallen out with (now former) transport minister Lord MacDonald ... A lot of briefing and counter-briefing, you would guess, of which this interview is certainly a part.

Morton wants to get his message about rail out to the business community, and he makes it plain he can 'brief' as well as anyone. By the time you are reading this, he may have gone, or he may have been retained. But if he goes, he intends to go out fighting.

It comes down to what the Government wants, he says, and what it will empower the SRA to do, overseeing the rail franchises, galvanising the industry into sorting out its problems and investing properly for the future, rather than just reacting lamely to each new crisis. 'If the Government perceives the SRA as a means of employing non-civil servants to work in a specialised capacity for the civil service, then frankly the SRA is not necessary.

'But if it is to be an executive agency of government trusted with the task of delivering substantial improvement in the railways, greater use of rail and so on, and in the sense that it is endowed with funding, given terms of reference, provided with statutary and whatever other authority and then left to get on with it, subject to arms-length overview from ministers, not working as an adjunct to the civil service but as an executive agency in charge of the task, then the SRA is a necessary and good idea.'

It will be decided by the new Cabinet. Morton's thesis for how the SRA should perform is quite close to how Prescott saw it, he says. MacDonald?

Morton smiles tightly. 'His view was more towards a specialised adjunct to the civil service.'

And it has taken two years to thrash this out? Because of the endless leaks that puddle round the SRA, it is no secret that Lord MacDonald for one was exasperated by the delays involved in awarding certain contracts.

There have also been jibes at the cost of it all, with Private Eye alleging that the SRA, which has 400 employees, already gobbles up pounds 16 million a year.

Morton shrugs. 'The process this far has been finding out what needs to be done, and the setting up of circumstances for doing it, the preparing of a strategic plan, the launching of the refranchising process, the final determination that we are going to proceed with system enhancement the way we proposed more than a year ago ... We've been in the process of determining what the SRA should be and what it is going to do and how it is going to do it. This election is a coincidence, but now is the time it is reasonably clear that the Government should decide to let it loose.'

But nothing will get fixed without money - Morton and the Government at least agree on that. Close to pounds 60 billion will be needed to revive Britain's rail system. And where will the cash come from? Morton is not as convinced as the Government that more than half will arrive from the private sector.

'Well, says who?' queries Morton. 'It's all very well, but nothing happens just because you say it is going to happen. You've got to actually bring it about, get the agreement of others involved, then plan it and do it.'

Does he think the Government actually wants an improved, affordable rail system? 'There are people who believe the railways will not deliver what is needed, therefore the countryside must be concreted to make enough roads,' admits Morton. 'But I don't believe that is the majority view of the British people, or the prevailing view, and it is not Mr Prescott's view, and I tend to agree with him.'

Even though the Government, after all those petrol protests, seems intent on appeasing the road lobby by offering tax concessions to hauliers? 'Politics are politics,' says Morton dryly. 'We have made the point in our freight strategy statement that that doesn't help. I am saying the Government has to make a commitment. It has to set the SRA loose.

'But I don't think it is a question of giving in to the road lobby or having a railway as two yes-or-no alternatives,' he continues. 'The government has to manage the expectations of road users about the cost of using roads.

At the moment, they are free at point of delivery, and in the case of trunk roads - motorways - they probably shouldn't be. And the Government has to manage the expectations of people about the matter of using trains.'

That throws up a number of questions. Will the SRA lobby for road tolls?

And just what are people's expectations? Anyone who has travelled on trains in continental Europe knows how far behind we have fallen. Step on a commuter train in Denmark and it whooshes between towns, carpeted, airline-seated, clean-windowed, rarely even a minute late. And it's cheap. Compare that with the clattery, filthy old stock with blocked lavatories and ripped seating run by a company such as Connex South East, serving the most affluent part of Britain and charging huge prices. Can we ever catch up the lost ground? And how did we get to this?

The key point, contends Morton, is that up to privatisation there was 35 years of under-investment. 'British Rail became world champions at make-do-and-mend, bodging on, spinning out minimal resources into maximum use. Everybody assumed that because BR was public-sector and the newcomers would be private-sector huge efficiency savings would develop. Well, they didn't, because BR was stretching every pound a long way. It wasn't the same as British Airways or electricity or gas.

'The problem was that the costline stayed stable ... Fortunately, the revenue line went up after privatisation, there were 35% more passengers in five years, 45% more freight. That paid for a reduction in subsidy. But because the subsidy is reducing, it doesn't generate the cashflow to pay for new assets. And, anyway, if you have got short-term franchises you are not going to be interested in creating new assets.'

So privatisation was ill thought out?

'Yeah, it was a mess.' Are the train operators to blame? Probably not, says Morton. People forget that train services in 1997 and 1998 were actually a lot better than at privatisation.

And has Railtrack performed well?

'No,' he says bluntly. Where has it failed? 'Where has it succeeded?' he asks, with another lengthy pause. Then he continues: 'Railtrack has not delivered a well-maintained, safe, efficient railway network. It was getting better but, as it approached capacity and got older, there was more and more pressure on it, it began to fail. It was going down before Hatfield. Hatfield was merely a catastrophic failure episode. So Railtrack has to get its core business in good order, which is the operation and maintenance of the railway network; then you have got to have efficient train operators delivering customer-oriented services with ample quality assets and good management.'

Morton is convinced he can set up an SRA to provide that. His vision of the authority is almost like an investment bank: to fund and encourage development of private-sector activities. 'To make clear the policies, implement them, appoint the people, require reporting and let them get on with it,' he says. 'It's not the way we usually operate here. It may be the way it is set in the legislation but, inevitably, the Treasury will try and get back under its control every bit of expenditure, and the ministry will try and get back under its control every statement, every move, every piece of initiative, and that just doesn't work.'

What he fears is that the politicians will fudge it: spend too little money or shackle the SRA so it cannot act. 'If an attempt is made to say: 'There's a sum of money, do what you can with it, ignore the rest,' then the rest is going to complain furiously, and, by and large, the rest will be Scotland, Wales and the north of England, and they will be quite vociferous.'

Politicians also have to commit to long-term regeneration, the sort of commitment British governments hate. 'What you have to recognise about rail regeneration is that it takes years. Starting it is a two-year project, finishing it could take 10 to 12 years.'

And that, says Morton, is not the sort of proposition that British politicians like. 'It is not in the British nature. We don't produce long-term plans and then follow them for years, least of all in the public sector. The public-sector investment horizon is very short because the Treasury horizons are very short - because the Treasury has managed cash for the last 40 years; it hasn't managed economic development.

If we join the euro, we will probably see more of a French approach, which is to plan.'

In France, he says, politicians understand business rather better than in the UK. Has it worked to their mutual advantage?

'Well, they seem to do better than us, their economy has grown more, they have a positive balance of payments in manufacturing, despite an arthritic code of employment that we feel is a terrific burden.'

His eyes are twinkling now, the feet are shuffling, the old bruiser is sparring comfortably. During his time at Eurotunnel, an Anglo-French project, Morton enjoyed his British colleagues' discomfort at working with their Continental counterparts. The French, too, appreciated Morton's style. 'One French colleague said to me: 'You are so hopelessly direct, Alastair, you couldn't possibly be English.' He meant it as a compliment, because he found it so difficult to do business with typical English.'

Morton is unsure where he gets that directness from. His South African upbringing? Maybe, he says. He was born there in 1938. His mother was Cape Dutch - 'They were the ones who stayed and farmed among the Brits when the Afrikaaners trekked away' - his father was Scottish and worked for Shell.

But he clearly had an independent streak from an early age. He came to Oxford in the early '60s after attending Witwatersrand University in Johannesburg and never really went back. He hated apartheid and lost touch with his mother's family. Only now, after the old regime has been dismantled, does he return regularly. 'I took my son and daughter there when they were 20 and they sat down to lunch with 33 first cousins they didn't know existed!'

Will he retire there? He doesn't think so. 'I've built my life somewhere else, and I'm happy,' he says. Anyway, he would miss his home outside Chichester and his boat, a 22ft inshore yacht that he races with friends.

But, he warns, being ill last year made him doubly determined not to waste his final years in business.

'You see, the problem with this job is that I was meant to be facing the railways, but what I have found myself doing is 60% facing the railways and 40% trying to sort out the tangles in Whitehall, and it's not what I signed up to do.'

And yet throughout his career Morton has revelled in these slots, caught between public and private sector. If anyone can untangle Whitehall, surely it is him. Others agree.

'Alastair finds many of the issues involved in the public sector both important and interesting, and he is a very determined guy,' says Sir Stephen Robson, the former Treasury mandarin who is now a director of Cazenove. 'When he has identified an objective he pursues it with single-minded determination.'

The problem comes when the objectives diverge. Looking back through the cuttings, you get the sense that, with each of Morton's projects, a time is reached when he feels it necessary to keep the politicians on track. Seven years ago he was telling MT that PFI would only work if John Major's government got behind it. Sound familiar? Morton 1994: 'I am absolutely convinced PFI could happen and can happen. It remains to be seen whether there is the determination in government, and particularly the Treasury, to make it happen.'

So is this interview just a typically Mortonesque dig at the Government to keep on track? Or is he finding his SRA role more uncomfortable than others? For instance, the way Whitehall and politicians have changed has clearly surprised him.

'The notion that things are confidential in Whitehall has virtually disappeared,' he gripes, 'and you have to cope with it by trying to be on the front foot ...' By counter-briefing? He smiles. 'By whatever is appropriate, having at least part of the initiative.'

And the odds on him pulling it all off? 'In my time, 1,000 to one against, as I am not going to be here that long. For others? I think it is an enormous challenge ...' he pauses, choosing his words ... 'the success of which is by no means assured.'

Then he is up and off to have his photos taken next door, telling the photographer that he can only have a few minutes. Is he a man knuckling down to a tough job, or firing a Parthian shot on his way out? I'd have guessed the latter till he e-mailed me a few days later, wanting to ring, give me extra time - not the response of a man planning more yacht races this summer.

When he calls, I ask him if he's staying. Yes, if he gets what he wants. But he'll still leave next year when his contract ends.

Then I ask why he's fascinated by these hypersensitive, high-pressure, public/private jobs. Didn't he ever yearn just to run a bog-standard FTSE-100 company? No, he says, he likes start-ups and turnarounds and, especially, challenges.

Then he starts a detailed lecture about the relation of public and private sector over the decades, the history of privatisation and the challenge it all presents. He is totally absorbed and absolutely intellectually engaged by it. It is such a challenge, he says, to get a decent public transport system in this country - one that has been bodged by government after government. It wasn't even raised at the election, because all sides are embarrassed about it.

'That's why I took this job,' he says. 'I don't need to work hard and I don't need the high profile. It's the last thing in my career. It is a challenging and interesting thing, and it is something that needs to be done.' And before I can say good luck, he says goodbye.

< MORTON IN A MINUTE 1938 Born South Africa. Educated St John's College and Witwatersrand University, Johannesburg; also Worcester College, Oxford, and MIT, America 1959 Worked for Anglo-American Corporation in London and Africa 1964 Joined International Finance Corporation (World Bank Group), Washington DC 1967 Appointed to Industrial Reorganisation Corporation 1970 Appointed executive director, Drayton Group and chairman, Draymont Securities 1976 Becomes managing director of BNOC 1982 Appointed CEO of Guinness Peat, later chairman 1987 Co-chairman of Eurotunnel, later group CEO 1993 Chairman of the private finance panel advising the chancellor of the exchequer 1999 Chairman of the Strategic Rail Authority

Sir Alastair Morton is also a director of National Power and Lonrho, the South African mining concern, and chairman of the National Youth Orchestra.

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